29th September 2020
29th September 2020
By Sarvarth Misra, co-founder, and CEO at ContractPodAi
It is always important for general counsels (GCs) and legal teams to be aware of all of the risks within the company, particularly during contract management and review. With thousands of contracts to keep track of during the drafting and review processes, risks embedded in these contracts can often go unnoticed.
The good news is that legal departments can reduce risks and improve compliance efficiency by using available contract management tools, such as contract lifecycle management (CLM) solutions. Instead of going through copious amounts of contracts manually, which is rather inefficient, they can search for key clauses and compliance quickly and easily, never missing any contractual details.
Now, let's explore how using CLM software helps GCs and legal teams with risk and compliance management.
Let's face it, legal teams are used to a more ‘linear’ way of reviewing contracts. That means manually going through legal documents, with very little interaction with technology. While this method is sufficient for legal departments, it is not exactly ideal, especially as they work remotely. That is because physical documents are difficult to attain and, therefore, review properly.
A survey of legal and compliance leaders by Gartner revealed that automation in legal improves speed significantly. With it, nearly one-quarter of respondents saw improvements in speed - in 10 legal activities - exceeding 50 percent with automation. Some technological improvements increased speed by as much as 90 percent or more. More specifically, contract management tools like CLM software point out all relevant clauses and contractual risks within minutes or seconds, not to mention speed up the entire contract lifecycle from beginning to end. And this allows lawyers to focus on the strategic tasks that they seldom have time to do.
Ever since the COVID-19 pandemic started, the “force majeure” clause has been ever so prominent. Without CLM solutions, in particular, legal teams have had to go through hundreds of physical documents - more than likely missing such clauses or taking way too much time seeking them out. But this contract management software can search for agreements in a repository, showing you the risks and compliance issues within them. Legal teams can then act on them straight away.
And this can be for any compliance standard that companies must abide by, such as GDPR, LIBOR, or CCPA. The contract management tool simply highlights clauses based on their risk level and suggests proper compliance language. Ultimately, this helps legal teams to find and manage these risks before it is too late.
CLM solutions greatly increase governance and transparency in legal teams’ contract review process also. Without it, there can be a severe lack of risk management - and clarity in agreements. This is true whether contracts and related documents are contained in filing cabinets or drawers, or digitized in a contract repository. And not only can this be overwhelming for legal departments, it can leave them vulnerable to risk and compliance issues down the line.
Having such a contract management tool, on the other hand, offers lawyers complete transparency when it comes to their contract database. It invariably safeguards against the issues mentioned above.
So, managing risk and adhering to compliance standards no longer need to be issues for GCs and legal teams. Recently, ContractPodAi launched its newest feature, Contract Risk & Compliance, as part of its CLM software. It helps you to understand all of the contract risks while reducing the time and effort spent on manual contract review and renewals. It also allows for more control and transparency in all legal documents.
To find out more, download our Contract Risk & Compliance Datasheet today.
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